On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (“OBBBA”) into law as Public Law 119-21, introducing a range of individual and business tax changes. One such change was the establishment of new “Trump Accounts” under Internal Revenue Code Section 530A. Trump Accounts are a new type of individual retirement account for the benefit of children within what is referred to as the “Growth Period.” The Growth Period begins when a Trump Account is established and ends at the close of the calendar year in which the beneficiary turns 18.

On December 2, 2025, the Department of the Treasury and the IRS issued IRS Notice 2025-68, providing the first guidance on Trump Accounts. While the Notice highlights the potential of Trump Accounts as a new planning opportunity, it also mentions significant considerations that will require careful attention going forward. For example:

• Government pilot contributions. The federal government will make a one-time $1,000 pilot contribution to the Trump Account of each “eligible child” for whom an election is made by filing IRS Form 4547, named after Trump’s presidential terms. An eligible child is a U.S. citizen born between January 1, 2025 and December 31, 2028. No contribution of any type may be made before July 4, 2026, and contributions must be made by the end of the calendar year to count for that year. These eligibility and timing rules introduce early risk around missed elections.

• Annual contribution limits. During the Growth Period, aggregate contributions from parents, guardians, relatives, employers (see below), and other private sources are generally limited to $5,000 per year.

• Employer contributions. Employers may contribute, as a fringe benefit for employees, $2,500 per calendar year per employee (not per dependent) under IRC Section 128, and those contributions count toward the $5,000 annual limit.

• Election procedures (IRS Form 4547). Taxpayers must file IRS Form 4547 to open an initial Trump Account and enroll in the pilot program. Making timely and accurate elections, tied to tax filings and employer benefit elections, will likely be one of the earliest challenges for taxpayers.

Until the beneficiary turns 18, the Trump Account may only be invested in “broad U.S. equity index funds” that track a “qualified index” such as the S&P 500, don’t exceed annual fees or expenses above 0.1% and don’t use leverage, which typically uses debt or borrowing to boost returns. Generally, no withdrawals may be made before the year in which the beneficiary turns 18 with limited exceptions, including certain rollovers, distribution upon death, and for excess contributions. Once the beneficiary reaches age 18, the Trump Account is treated as a traditional IRA and is subject to regular IRA distribution rules.

As the first tax filing season for the Trump account framework approaches, it remains uncertain how widely these accounts will be adopted by taxpayers and employers.

If you have questions regarding the matters discussed in this client alert or would like more detailed analysis, please contact any member of our Corporate or Tax Practice Group.

Note: Although Trump accounts are authorized by statute and interpretive guidance is now published, the Notice itself is not binding law in the way that final Treasury regulations are binding; it is intended as interim guidance to facilitate transition to formal regulations. Final regulations are expected to be issued following the required notice-and-comment process.